Several hospital trusts have told HSJ they are seeking additional support to cover the costs of their private finance initiative deals or intend to buy out the schemes.

  • Peterborough and Stamford Hospitals FT to request up to £9m extra support for PFI deal
  • Another finance director warns more trusts are likely to need additional support
  • Some trusts looking to follow Northumbria’s example to buy out contracts

Troubled Peterborough and Stamford Hospitals Foundation Trust already receives £10m of support for its PFI deal but believes the “premium cost” of running the hospital requires £19m a year.

Hexham general hospital

Trusts are seeking to follow Northumbria Healthcare’s example to buy out their PFI deals

The trust, which has forecast a deficit of £39m this year, said it has been talking to the Department of Health about a tariff top-up payment to contribute to the extra costs.

A spokesman said: “The premium cost of running a PFI hospital, versus a non-PFI hospital, is not covered by the average payment by results tariff that every trust is paid.

“We have been talking to the DH about a tariff top-up payment to contribute to the extra cost. We have received some support for the additional cost, but feel that we could make the case for further support.”

The FT’s scheme was completed in 2010 and its unitary payments total £40m a year. It was one of seven providers which qualified for support for its PFI in 2012.

All but one of the others said their support was adequate, or that they have been told extra funding is not available. Lewisham and Greenwich Trust, which inherited a PFI deal from South London Healthcare Trust, declined to comment.

A finance director at another trust, which is not one of the seven, and who asked not to be identified, said he expects more trusts to need support for their PFI schemes. He said the payments are often linked to inflation on the retail price index, which has been increasing significantly faster than NHS tariffs.

He added: “We have beautiful facilities, but if you compared the cost of having them under the traditional public dividend capital then it’s about 3 per cent higher. So when everyone is struggling to balance the books, it gives us a much harder challenge and will certainly be an issue.”

He predicted that trusts will increasingly raise the issue when asked to find further efficiency savings, for example under the Carter review into productivity.

Taunton and Somerset FT, which delivers radiotherapy treatment from a PFI building, said the running costs are not reflected in the national tariff. It currently receives £800,000 of additional support from its commissioner, but said this was a reduction on recent years, creating a shortfall of £3.3m.

A spokesman said: “As part of the 2015-16 contract negotiation with NHS England for specialist services, it has been agreed that a joint review of radiotherapy prices will be undertaken with a view to developing a formalised local variation to reflect the actual costs of delivering radiotherapy.”

HSJ contacted 30 trusts with the largest PFI deals as a proportion of turnover to ask if they were seeking additional support, or looking to buy out their contract.

A number of trusts said they were looking at whether they can follow the example of Northumbria Healthcare FT in buying out their PFI deal.

A spokesman for Great Western Hospitals FT, where discussions are more advanced than in other areas, said: “Over recent months we have been proactively looking at opportunities to ensure we get the best value for money for taxpayers and we’re confident that we will have some positive options to explore next year.

“However, any final decisions relating to our PFI agreement will first need to be approved by the Treasury.”

Mid Yorkshire Hospitals Trust said buying out its contract was part of its long term plan.

However, other trusts said they have explored the option and it did not represent value for money. Chelsea and Westminster Hospital FT said it had considered a buyout, but local authority funding was not available as it was in Northumbria.

The DH has been approached for comment.